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The cynicism of the global auto industry, or why a modern car should be more expensive

  • November 19, 2022
  • 0

A car not a luxury, but a means of transport? Today, many Russians are ready to argue with this, who have the impression that modern car manufacturers are

A car not a luxury, but a means of transport? Today, many Russians are ready to argue with this, who have the impression that modern car manufacturers are doing everything possible to make personal mobility a luxury accessible to few. Which is strange in itself, because the basis of the well-being of any car brand is the sales volume of its products. However, the cost of cars is constantly rising. Plus, it’s not growing at the cost of the same automakers. The price of a car has long become an analogue of its prestige. Whether this is true, the AvtoVzglyad portal understood.

Of course, the final price of a vehicle consists of many factors. There are the design costs, the costs of energy and materials, the salary of employees and of course top managers, depreciation of factory buildings, equipment, advertising costs to maintain brand awareness, and the like. But modern cars are not made from scratch.

In our time, a huge knowledge has been accumulated by mankind over more than 120 years of the history of the mass car industry, which allows you to create a dream car. It has long been figured out how to achieve perfect driving behavior, maximum safety, ultimate comfort and environmental friendliness. Not to mention the aerodynamically perfect and emotionally captivating design. But every car manufacturer, when releasing a new model, tells us how much labor and financial resources they spent on it and why this car should cost more than the previous one.

At the same time, there is a constant emphasis on the use of modern modular body architecture and state-of-the-art electronics of the latest generation. Which in itself is strange, because the use of such technologies should only reduce the cost of a car. Especially given the mass production. So why isn’t this happening? Everything is simple. Car manufacturers have long since become ecosystems in their own right, within which they no longer determine the cost price, but the value of their creations for the rest of the world. And it looks like situations like those that occurred during Ford’s transition from manual assembly of its cars to assembly-line assembly will never happen again.

Recall that in 1908, Henry Ford launched his new Ford T model, which cost $825. At the time of the launch of the famous Ford assembly line, by the end of 1912, the price of the car had dropped to $ 375, and in 1924 the cost fell to $ 265! There was a price reduction more than three times! Isn’t it an absolutely incredible situation for our time? In which they try to convert mobility into an elite privilege, which makes us believe in its high value.

It is clear that, according to modern marketers, a car should cost so much that a person still has the illusion that he can buy it. Those can be supported through loaner programs or car ownership through a subscription. Ultimately it forces you and me to pay even more for mobility.

Is there a way out of this situation? If we talk about new cars, then most likely – no. For this, some kind of systemic crisis must arise in the global car market. But due to the fact that the total number of cars on the planet is about 1.5 billion, there is a huge market for used cars, which still allows a car not to be a luxury, but a means of transportation.

  • Photo britannica.com
  • Photo britannica.com

Of course, the final price of a vehicle consists of many factors. There are the design costs, the costs of energy and materials, the salary of employees and of course top managers, depreciation of factory buildings, equipment, advertising costs to maintain brand awareness, and the like. But modern cars are not made from scratch.

In our time, a huge knowledge has been accumulated by mankind over more than 120 years of the history of the mass car industry, which allows you to create a dream car. It has long been figured out how to achieve perfect driving behavior, maximum safety, ultimate comfort and environmental friendliness. Not to mention the aerodynamically perfect and emotionally captivating design. But every car manufacturer, when releasing a new model, tells us how much labor and financial resources they spent on it and why this car should cost more than the previous one.

At the same time, there is a constant emphasis on the use of modern modular body architecture and state-of-the-art electronics of the latest generation. Which in itself is strange, because the use of such technologies should only reduce the cost of a car. Especially given the mass production. So why isn’t this happening? Everything is simple. Car manufacturers have long since become ecosystems in their own right, within which they no longer determine the cost price, but the value of their creations for the rest of the world. And it looks like situations like those that occurred during Ford’s transition from manual assembly of its cars to assembly-line assembly will never happen again.

Recall that in 1908, Henry Ford launched his new Ford T model, which cost $825. At the time of the launch of the famous Ford assembly line, by the end of 1912, the price of the car had dropped to $ 375, and in 1924 the cost fell to $ 265! There was a price reduction more than three times! Isn’t it an absolutely incredible situation for our time? In which they try to convert mobility into an elite privilege, which makes us believe in its high value.

It is clear that, according to modern marketers, a car should cost so much that a person still has the illusion that he can buy it. Those can be supported through loaner programs or car ownership through a subscription. Ultimately it forces you and me to pay even more for mobility.

Is there a way out of this situation? If we talk about new cars, then most likely – no. For this, some kind of systemic crisis must arise in the global car market. But due to the fact that the total number of cars on the planet is about 1.5 billion, there is a huge market for used cars, which still allows a car not to be a luxury, but a means of transportation.

Source: Avto Vzglyad

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